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*B ^60 Its
AIBERT RUSSEL ERSKINE
Studebaker Shop and Home
Ashland, Ohio
1835
HISTORY OF
The Studebaker Corporation
BY
ALBERT RUSSEL ERSKINE
^\^
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L. C.
Dedicated to the Memory of My Friend
JOHN MOHLER STUDEBAKER
372822
THE STUDEBAKER CORPORATION
General Offices: South Bend, Ind.
Works: South Bend, Ind., Detroit, Mich., Chicago, 111.,
and Walkerville, Ont.
DIRECTORS
Frederick S. Fish, Chairman
Waddill Catchings Herbert H. Lehman
Frederick P. Delafield Philip Lehman
A. R. Erskine L. J. Ollier
FT Studebaker Fish Geo. M. Studebaker
Henry Goldman J. M. Studebaker, Jr.
C. C. Hanch a. B. Thielens
A. Barton Hepburn M. F. Wollering
EXECUTIVE COMMITTEE
Waddill Catchings
Frederick P. Delafield
A. R. Erskine '■* »^
Frederick S. Fish
Herbert H. Lehman
*^Eo. M. Studebaker
J. M. Studebaker, Jr.
FINANCE COMMITTEE
A. R. Erskine ■* ^^ *Kjeo. M. Studebaker
Frederick S. Fish M. F. Wollering
C. C. Hanch
OFFICERS
Frederick S. Fish
A. R. Erskine "^^^
M. F. Wollering
L. J. Ollier
C. C. Hanch . .
H. E. Dalton
A. G. RuMPF
C. D. Fleming
W. P. Shillington
Geo. a. Fulmer .
J. M. Peterson .
Chairman of Board
President
Vice-President
Vice-President
Treasurer
General Auditor
Secretary
Assistant Treasurer
Assistant Treasurer
Assistant Treasurer
Assistant Treasurer
Hawkins, Delafield and Longfellow, New York . . Counsel
Touche, Niven & Co., New York and Chicago . . . Auditors
Lawyers Title & Trust Co., New York . . . Transfer Agent
Columbia Trust Co., New York Registrar
First Trust & Savings Bank, Chicago . . Transfer Agent
Harris Trust & Savings Bank, Chicago Registrar
INDEX OF ILLUSTRATIONS
PAGB
First Studebaker Shop, Ashland, Ohio, 1835 .... 2
John Studebaker 10
Rebecca Mohler Studebaker 12
Henry Studebaker 14
Qement Studebaker .16
John Mohler Studebaker 18
Peter Everst Studebaker 20
Jacob Franklin Studebaker 22
Frederick Saihuel Fish 24
Henry Goldman 26
H. & C. Studebaker Factory, South Bend, 1856 ... 28
Interesting Advertisement; found in an old scrap book,
in the handwriting of Clem Studebaker .... 30
H. & C. Studebaker Factory, South Bend, 1868 ... 32
Studebaker Branch House, St. Joseph, Mo., 1870 . . 34
Studebaker Factories, South Bend, 1872 36
Studebaker Factories, South Bend, 1876 38
Studebaker Branch House, Chicago, 1885 40
Studebaker Factories, South Bend, 1890 ..... 42
Studebaker Factories, South Bend, 1900 44
Y.M.C.A. Building, 1908 46
Studebaker Factories, South Bend, 1910 48
Studebaker Factories, South Bend, 1918 50
Studebaker Foundries, South Bend, 1918 .... 52
Studebaker Factories, Detroit, Plants Nos. 1 and 10, 1918 54
Studebaker Factories, Detroit, Plant No. 2, 1918 . . 56
Studebaker Factories, Detroit, Plants Nos. 3 and 4, 1918 58
Studebaker Factories, Chicago, Plant No. 8, 1918 . . 60
Studebaker Factories, Walkerville, Canada, 1918 . . 62
Studebaker Branch Houses, 1918 64
Houses of Foreign Dealers, 1918 66
Types of Studebaker Farm Wagons, 1918 . . . . .68
Types of Studebaker Buggies, 1918 70
Types of Studebaker Dump and Delivery Wagons, 1918 72
Types of Studebaker Flushers and Oilers, 1918 ... 74
Types of Studebaker Harness, 1918 76
Relic in Studebaker Museum 78-80
Types of Studebaker Electric Automobiles, 1902, 1912, 82-84
Types of Studebaker Gasoline Automobiles, 1904 -1910, 86-88
Types of Studebaker Automobiles, 1918 .... 90-94
President Wilson's Message 96
PREFACE
THIS BOOK IS written for the informa-
tion of the 3,000 stockholders of
The Studebaker Corporation, the 12,000
dealers in its products living throughout
the world, its 15,000 employees and
numberless friends.
Studebaker products have been manu-
factured and sold for nearly seven
decades, and its name is a household
word wherever vehicles are used. There
are few trade names in American industry
older or more highly regarded than the
name "Studebaker," which has always
stood for quality and fair dealing, and
this name today is the greatest asset the
corporation owns. Buildings, machinery
and operating organizations can be
replaced for money, but an old and
honored trade name can only be acquired
by merit and through the lapse of time.
During the past seven years The Stude-
baker Corporation has spent 36,000,000
for advertising, yet it fully recognizes
that the quality of its products and the
satisfaction they give customers are, in
the last analysis, the only safe foundation
for the upbuilding and perpetuation of
its name. It is the ambition of the author,
who is its President, to continue the
policies toward the public which will add
luster to the name "Studebaker."
South Bend, Indiana, A. R. E.
February 2$^ iqi8
John Studebaker
1799-1877
10
THE STUDEBAKER BROTHERS
'TpHE ancestors of the Studebaker
-^ ^ family first arrived in America at
the port of Philadelphia on September 1,
1736, on the ship Harle, from Rotter-
dam, Holland, as shown by the original
manuscripts now in the Pennsylvania
State Library at Harrisburg, and included
Peter Studebecker, age 38 years; Clement
Studebecker, age 36 years; Henry Stude-
becker, age 28 years; Anna Margetha
Studebecker, age 38 years; Anna Cather-
ine Studebecker, age 28 years. The last
part of the name, "becker,'' was after-
wards changed to "baker." The tax
list of what was then Huntingdon Town-
ship, York County, Pennsylvania, in
1798-9, showed among the taxables were
Peter Studebaker, Sr., and Peter Stude-
baker, Jr., wagon-makers, which trade
later became the foundation of the
family fortune and the corporation which
now bears the name.
John Studebaker, father of the five
brothers, born in Adams County, Penn-
11
^^^^^^^^^^f ^^^^^^^^^1
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Rebecca Mohler Studebaker
1802-1887
12
THE STUDEBAKER BROTHERS
sylvania, was the son of Peter Stude-
baker. In 1830 he bought property near
Gettysburg, Pennsylvania, on which he
built a brick house and shop in which
he pursued the trade of blacksmith and
wagon builder. Becoming imbued with
the pioneer spirit, he resolved to go
West and grow up with the country.
So he disposed of his property in 1835
and moved with his family and worldly
possessions to Ashland, Ohio, making
the trip overland in three wagons, one
of Conestoga pattern, drawn by four
horses. Here he bought property and
again established himself as a black-
smith and wagon builder, working indus-
triously and practicing frugality. Striv-
ing for success, he encountered the hard-
ships of those days, and for some years
found life a hard struggle. With a
small income and a large family, it was
necessary for his wife to spin and weave
the cloth and make the clothes of the
family, which included ten children.
Brighter days followed in later years,
13
Henry Studebaker
1826-1895
14
THE STUDEBAKER BROTHERS
and ultimately he and his wife moved
to South Bend and lived there until
their death.
The boys were put to work early. On
one occasion the three oldest boys drove
fifty miles into an adjoining county and
worked as harvest hands at small wages
for some weeks. They returned home
with sixty dollars, which they gave to
their father. When the , older boys
became of age, their father urged upon
them the importance of getting an inde-
pendent start in life, so about 1850
Henry and Clem went overland to South
Bend, Indiana, where Clem taught school
for a time and also worked at black-
smithing for SO cents per day. Here, in
1852, the two brothers, under the firm
name of H. & C. STUDEBAKER, began
blacksmithing and wagon-building, with
a capital of sixty-eight dollars and two
forges. The first year they built two
wagons, one of which was in constant
daily use for thirty-three years.
15
Clement Studebaker
1831-1901
16
THE STUDEBAKER BROTHERS
John M. came to South Bend to join
his brothers, but, meantime, gold had
been discovered in California and thou-
sands of venturesome men, traveling in
wagons, were rushing out there to
Eldorado in quest of fortune. These
were the rosy pioneer days, and men
were daring, so it was natural for young
John M., then nineteen, ' to become
interested. He determined to go, and
he and his brothers built a wagon which
he traded to an expedition for his passage
and board. This was one of the wagons
of the caravan which arrived at old
Hangtown, Cal. (now Placerville), five
months later, in good condition. They
arrived in 1853, and in 1912, when
John M. returned to Hangtown and
gave a reunion dinner to the old settlers
and friends of his youth, he recounted
his experience in graphic words. He
said :
"We were mote than five months on
the road, and landed right here on this
square in August, 1853, and I had but fifty
17
John Mohler Studebaker
1833-1917
18
THE STUDEBAKER BROTHERS
cents in my pocket. Although that was
my only earthly possession, my spirit was
not daunted, for we were all led to believe
that all we had to do was to go out on the
morrow and dig all the gold that the
heart could desire. Of course, a big crowd
gathered around us, and while we were
trying to get them to talk about the gold
mines, they insisted on asking questions
about what had happened in the States since
they had heard from their friends. While
the hubbub was going on, a man came up
and asked if there was a wagon-maker in
the crowd of new arrivals. They pointed
me out, and he asked, *Are you a wagon-
maker?' 'Yes sir,' I answered, as big as
life, with my fifty-cent piece in my pocket.
He offered me a job in his shop, and I
replied, *I came to California to mine for
gold.' After he had gone, a man stepped
up very politely and said, 'Will you let
me give you a little advice, young man.?'
and upon my replying in the affirmative,
continued, 'Take that job and take it
quick'. His manner impressed me. He
said that there would be plenty of time to
dig gold, it wasn't always a sure thing,
and that the job just offered me was a
mighty fine chance for a stranger. I was
19
Peter Everst Studebaker
1836-1897
20
THE STUDEBAKER BROTHERS
impressed, and decided to go to work for
the wagon-maker. He wanted me to make
wheelbarrows for the miners, and arranged
to pay me ten dollars each for my work.
The tools were poor, and material only
pitch pine lumber. I stuck to the job,
made many wheelbarrows, and put my
money in the bank. I soon found that
hundreds and thousands of the pioneers
who tried the mines never made a cent,
but those who stuck to steady jobs at
good wages and saved their money were
doing well. We worked many a night all
night, frequently making miners' picks
and repairing stage coaches, which came in
late, and ha;^ to get out at six o'clock in
the morning."
Meantime, back in South Bend, the
little firm of H. & C. Studebaker was
having a hard time financing its busi-
ness, was confronted with judgments,
and about to go under. They had few
tools, bought their material as needed
from a local hardware store, and usually
traded their wagons to farmers for live
stock or crops, or took notes in pay-
ment. Money was scarce and seldom
21
Jacob Franklin Studebaker
1844-1887
22
THE STUDEBAKER BROTHERS
obtained for sales. They appealed to
John M. to come back to South Bend
and join them in business. Accordingly,
after five years of life in California, he
yielded to their suggestions and took
passage on a sailing ship for New York,
via the Isthmus of Panama, with 38,000
he had earned in gold nuggets sewed in
a leather belt and strapped around his
waist. . Upon arrival at South Bend, he
invested his money in the business and
bought out the interest of his brother
Henry, who being discouraged and pre-
ferring a rural life, decided to retire and
become a farmer. This new money
rehabilitated the firm of H. & C. Stude-
baker and assured its future prosperity.
At that time, in 1858, the total assets
of the firm were valued at 310,000.
Peter E., the fourth brother, who had
been a merchant in Goshen, Ind., shortly
afterwards cast his lot with the firm
and became an important factor in its
management.
23
Frederick Samuel Fish
chairman of board
24
THE STUDEBAKER BROTHERS
During the next ten years the business
prospered, and in 1867 the factory build-
ings covered four acres of ground; 140
mechanics were employed; the pay roll
amounted to over 31,500 per week; and
the inventory of material was sufficient
for about six thousand vehicles.
25
Henry Goldman
DIRECTOR
26
STUDEBAKER BROTHERS MFG. CO.
N January 1, 1868, the net tangible
assets of H. & C. Studebaker
amounted to 3223,269.06, and the sales
to about 3350,000 annually.! Thus had
the business grown to stfch extent that
it was determined to form a corporation,
and, accordingly, Studebaker Brothers
Manufacturing Company was organized
March 26, 1868, under the statutes of
Indiana, with a capital of 375,000, paid
in one-third each by Clem, John M. and
Peter E. Studebaker, who were elected
directors. Clem was elected President,
John M., Treasurer, and Peter E.,
Secretary, at annual salaries of 32,000
each.
The capital of the company in com-
mon stock was increased Ijy stock divi-
dends in 1875 to 31,000,000, and in
1896 to 33,600,000, and in 1906, 31,500,-
000 six per cent preferred stock was
issued for cash.
27
H. & C. Studebaker
Factory
1856
28
STUDEBAKER BROTHERS MFG. CO.
In 1870 Jacob F. joined the company
as a salesman, and about this time
Peter E. was sent to St, Joseph, Mo.,
where he established a branch house to.
handle the trade of the pioneers, who
were crossing the country in wagons in
great numbers. Later, branches were
established in Salt Lake City, San Fran-
cisco, Kansas City, Portland, Dallas,
Minneapolis, Chicago, New York, Denver
and other large cities.
Clem Studebaker, President of the
company thirty-three years, was a public-
spirited, high-minded man of democratic
disposition, honored in his home town
and by the Nation. In 1897, a reunion
of former residents at Ashland, Ohio,
was attended by 10,000 people, among
whom were the three Studebaker brothers,
it being their first visit since their
removal nearly fifty years before. Clem
was the spokesman for the family, and
read a most interesting paper, reciting
an unvarnished story of thefearly ups
29
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fC'^ i'iC^-^ W'/^^ .Xi*^/* S
1 ^..v.... /J5^^< ..../.^ A-/ ^^-^- ^^'^7*' ^*
FACSIMILE OF AN OLD ADVERTISEMENT IN
CLEM STUDEBAKER's HANDWRITING; FOUND
IN AN OLD SCRAP BOOK
30
STUDEBAKER BROTHERS MFG. CO.
and downs of the family, its struggles
and triumphs, and the poverty which
had encompassed all. Seldom was told
a more pathetic and realistic tale of the
struggles of a pioneer family. His death,
in 1901, at the age of seventy, was
mourned by numberless friends through-
out the land. A splendid memorial
church, erected to his memory by his
widow, adorns the city of South Bend,
where he lived for fifty years.
John M. Studebaker was in charge of
the manufacturing department for forty-
five years, during which time he per-
sonally supervised the building of nearly
all vehicles that left the factory. He
built into these products his sturdy,
honest character, and to this fact, per-
haps more than any other, is due the
world - wide confidence in Studebaker
products. Upon the death of Clem, he
succeeded to the presidency, but con-
tinued to devote himself to the manu-
facturing department with the intensity
31
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STUDEBAKER BROTHERS MFG. CO.
and determination of purpose that was
his chief characteristic. After a life of
incessant industry and hard application,
this philosopher and friend of man,
crowned with worldly success and held
in high esteem, the last of the five
brothers, died at South Bend March 16,
1917, aged eighty-three years,
Peter E, Studebaker, a man of strong
personality, affable and popular, was
known throughout the country. Like
his brothers, he never forgot the early
hardships of his life, and upon one
occasion, in delivering an address to a
body of workmen, said:
"Workmen, I know what it is to be
poor, I know what it is to work for fifty
cents a day and board myself; I know
what it is to wish for the first white shirt;
I know what it is to live week in and
week out on mush and milk; I know
what it is to sleep next to a clapboard
roof and have the snow blow in and cover
my head; I know what it is to stand on
the outside of a circus tent and hear
83
^ :-'
First Studebaker Branch
st. joseph, missouri
1870
34
STUDEBAKER BROTHERS MFG. CO.
the music and the clown within, and wish
I had a quarter to take me in; I know
more — I know what it is to look wishfully
in a show case, filled with ginger-bread,
and wish I had a penny to buy some.
Knowing these things from hard experi-
ence, I say it makes my blood boil to
hear any man say one word that will
tend to encourage a man in a waste of
time and idleness."
Peter E. Studebaker died in 1897,
aged sixty-one years, the week following
his return from the reunion at Ashland,
and his death was a shock to the com-
munity in which he lived. He was
Vice-President of the company, and its
manager, at the time of his death.
The Studebaker brothers were all of
philanthropic and generous disposition.
Among their notable gifts is a 3250,000
Y. M. C. A. building in the city of
South Bend, presented in October, 1908,
when the following resolution was passed
by the directors of the company:
35
36
STUDEBAKER BROTHERS MFG. CO.
** Studebaker Brothers Manufacturing
Company is prompted to this gift by a
keen sense of the great worth resulting
from the work of the Young Men's
Christian Association in any community,
by the desire to furnish a medium for the
perpetuation of that work, and through
this gift not only to conserve that purpose,
but also to erect a perpetual monument
to the memory of the five brothers — Henry,
Clem, John M., Peter E. and Jacob F.
Studebaker, whose business activity and
industry, covering a period of more than
half a century, contributed to the up-
building of their community and the
possibility for Studebaker Brothers Manu-
facturing Company to make this contri-
bution for the development of the well
being and usefulness of young men."
The Studebaker brothers were friends
and associates of the early pioneers of
Chicago, including such men as George M.
Pullman, Nelson Morris, P. D. Armour,
J. B. Forgan, Marshall Field and Cyrus H.
McCormick, and were large investors
in Chicago real estate, which in after years
returned handsome profits to them and
37
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STUDEBAKER BROTHERS MFG. CO.
their children. They built the Stude-
baker Repository, on Michigan Avenue,
in 1885, which was the handsomest
business building on the boulevard at
that time, and later, in 1898, converted
it into the Fine Arts Building, that has
since served as a congenial home for the
artists of Chicago in music, painting and
sculpture, and includes the Studebaker
Theatre and the Fine Arts Theatre.
They also built large buildings for
branch houses in Kansas City, Salt Lake
City, Denver and Portland, and had
others erected on long-term leases in
New York City, San Francisco, Minne-
apolis and elsewhere.
In 1891 Frederick S. Fish, of Newark,
N. J., who had married a daughter of
J. M. Studebaker, associated himself
with the three brothers in the conduct
of the business, as a director and general
counsel of the company. Mr. Fish was
a practicing lawyer of New Jersey,
Studebaker Repository
chicago, illinois
1885
40
STUDEBAKER BROTHERS MFG. CO.
admitted to its bar in 1876, and was
president of the senate of New Jersey in
1887. His business activities were largely
in the direction of corporations, and
particularly in the city of New York.
In 1897, on the death of Peter Stude-
baker, he became chairman of the execu-
tive committee of the company, and
thereafter was a dominating influence in
the conduct of its affairs. Owing to his
foresight, initiative and effort, the com-
pany became interested in the horseless
vehicle, and thereafter expanded into
the automobile business, and ultimately
merged into The Studebaker Corpora-
tion.
Sons and sons-in-law of the Studebaker
brothers were active in the management
of affairs. Col. George M. Studebaker,
Clement Studebaker, Jr., J. M. Stude-
baker, Jr., and Frederick Studebaker
Fish served apprenticeships in different
departments and rose to important official
positions, with membership on the board.
41
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42
STUDEBAKER BROTHERS MFG. CO.
Nelson J. Riley, from St. Joseph, Mo.,
Charles A. Carlisle, from Toledo,
H. D. Johnson, from Monroe, Mich., and
William R. Innis, from New York, sons-
in-law, served many years in executive
positions and upon the board. All of
these men rendered valuable assistance
in the conduct of the business.
Col. Studebaker, J. M. Studebaker, Jr.,
and Frederick Studebaker Fish, all large
stockholders, continue on the directorate,
while the two former also serve as mem-
bers of the executive committee.
Being the world's largest producers
of horse-drawn vehicles, it was inevi-
table, with the advent of the automobile
in the late 90's, that the company should
become interested in this new vehicle
and its possible bearing upon its future
business. Hence, we find the company,
in the spring of 1897, building and
experimenting with a "horseless vehicle,"
as it was described in the minutes of the
43
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44
STUDEBAKER BROTHERS MFG. CO.
directors of May 12th of that year, also
in 1899, building bodies for electric runa-
bouts made by another company. And,
in 1902, actually launching into the
building of electric runabouts and trucks,
of which twenty were sold in that year,
and a total of 1,841 up to 1912, when it
abandoned electric machines. Also, in
1904, the company began building gaso-
line propelled automobiles, and during
the next seven years built and sold
2,481 passenger cars and trucks, the
chassis of which were made on contract
by another company, while the bodies
were produced in its own plants at South
Bend, and final assembly completed
there. The sales value of the 4,322 electric
and gasoline cars was 39,169,563.03.
The first electric runabout produced was
sold February 12, 1902, to F. W. Blees,
of Macon, Mo., and the first gasoline
car, a sixteen-horse-power two-cylinder
machine, sold July 22, 1904, to H. D.
Johnson, South Bend, Ind. Being assured
of the future of the automobile, the
45
Y.M.C.A.
A Stx^ebaker Gift
TO SOUTH BEND
1908
46
STUDEBAKER BROTHERS MFG. CO-
management now perceived the necessity
of embarking into the business on a
large scale commensurate with its posi-
tion in the vehicle industry, and sufficient
to employ the facilities of its large plants
and its sales organization throughout
the world. Moderately-priced automo-
biles that could be built and sold in
large quantities were the necessary
answer to this problem, and therefore, in
September, 1908, the company effected
an agreement with the Everett-Metzger-
Flanders Company, of Detroit, then being
organized to manufacture machines of
this character, under which it obtained
exclusive rights for the sale of Stude-
baker-E-M-F cars. It later acquired sub-
stantial stockholdings in the Everett-
Metzger-Flanders Company and, in 1910,
complete ownership of its business, plants,
assets and trade names. As will be seen
in the succeeding chapter, this under-
taking proved quite successful. Great
automobile plants have since been
constructed and acquired, in Detroit,
47
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48
STUDEBAKER BROTHERS MFG. CO.
Chicago and Walkerville, Ont., with a
present capacity, including facilities at
South Bend, of 100,000 automobiles per
annum.
During the forty- three years that
Studebaker Brothers Manufacturing Com-
pany operated as a corporation, it manu-
factured and sold over one million horse-
drawn vehicles of all kinds, and large
quantities of harness, the total sales
value of which amounted to 3119,249,000,
as shown by the following table:
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STUDEBAKER BROTHERS MFG. CO.
SALES AND DIVIDENDS
YEAR SALES DIVIDENDS
1868 $ 360,619.25
186^ 463,246.76
1870. 566,212 .46
1871 608,614 .30 $107,587.48
1872... 687,963.55
1873... 820,019.59
1874.... 761,116.95
1875 1,032,040 .96 150,000.00
1876.... 996,846.05
1877 1,107,269 .80 150,000 .00
1878. 1,180,872 .27 150,000:00
1879 1,199,908.24 100,000.00
1880 1,526,143 .09 100,000 .00
1881 1,670,407.97 100,000 .00
1882.. 1,979,264.82 100,000.00
1883 1,929,460.64 100,000 .00
1884. 1,776,947.55 100,000.00
1885. 1,637,561.25 100,000.00
1886: 1,892,602 .89 100,000.00
1887 2,155,512 .16 200,000 .00
1888 2,039,461 .78 200,000.00
1889. 2,098,396.47 300,000.00
1890. . . 2,161,094.45 300,000.00
1891 2,236,578 .59 150,000.00
1892 2,299,605 .03 150,000 .00
1893 1,896,176.02
1894 1,636,341 .73 100,000.00
1895 2,291,183 .67 100,000.00
1896 2,014,205 .33 150,000 .00
1897 2,785,255 .68 144,000.00
1898 3,227,716 .91 180,000 .00
1899 3,995,519 .11 180,000 .00
1900 3,970,228 .48 216,000.00
1901 3,682,890 .89 216,000 .00
1902 4,083,000.17 216,000.00
19Q3 4,695,188 .71 216,000.00
1904 4,839,520.68 216,000.00
1905 5,226,540.52 216,000.00
1906 6,818,929.23 216,000.00
1907. .. . 7,827,571 .92 306,000.00
1908 5,959,790 .47 306,000 .00
1909 9,507,915 .63 306,000 .00
1910 9,603,661 .32 816,500.68
Totals .31 19,249,403 . 34 26,758,088 . 16
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STUDEBAKER BROTHERS MFG. CO.
The original balance sheet of the com-
pany and its closing balance sheet at
the time of its merger into The Stude-
baker Corporation, are given below:
BALANCE SHEETS
ASSETS Jan. 1, 1868 Dec. 31, 1910
Cash $ 175.12 $ 444,524.94
Receivables 91,998.53 4,772,672.74
Investftients 600,019.13
Inventories •. 123,864.91 12,305,285.30
Plants and Property. . 64,175.00 5,984,697.11
Deferred Charges 211,124.50
Total ?280,213.56 ?24,318,323.72
LIABILITIES
Notes Payable $ 46,532.78 ?8,491,974.02
Accounts Payable .... 10,411.72 1,382,386.58
Minority Stock Sub.
Co.'s 29,100.00
First Mortgage 5%
Bonds 2,700,000.00
6% Preferred Stock 1,500,000.00
Common Stock 3,600,000.00
Surplus 223,269.06 6,614,863.12
Total g280,213.56 g24,3 18,323.72
Net Worth ?223,269.06 ?11,714,863.12
53
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EVERETT-METZGER-FLANDERS CO.
^ I^HE Everett-Metzger-Flanders Com-
^ pany was incorporated under the
laws of Michigan, August 4, 1908, with
a capital stock of 3500,000, which was
increased on October 7th of the same
year to 31>000,000. The company was
organized to manufacture and market in
large quantities a medium-priced gaso-
line propelled automobile.
Promptly after the organization of the
company, Studebaker made an arrange-
ment with it under which Studebaker
obtained certain exclusive rights to sell
the product to be known as Studebaker-
E-M-F cars. Studebaker shortly after-
wards acquired substantial stockholdings
in the company and in the following
year purchased the remaining stock and
became sole owner of the business.
The company, immediately upon
organization, acquired by purchase the
plant, property and assets of the Wayne
Automobile Company of Detroit, and
55
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56
EVERETT-METZGER-FLANDERS CO.
in October, 1908, the plants, property
and assets of the Northern Automobile
Company, of Detroit and Port Huron,
increasing its capital stock from 3500,000
to 31,000,000, to provide the necessary
capital. The growth and expansion of
the business was so rapid that the com-
pany was compelled to increase its plants,
and facilities, and by October 1, 1909, it
operated and owned the following plants:
Wayne Automobile Company,
of Detroit.
Northern Motor Car Company,
of Detroit and Port Huron.
Deluxe Motor Car Company,
of Detroit.
Monroe Manufacturing Company,
of Pontiac, Mich.
Western Malleable Steel Company,
of Detroit.
Pressed Steel Sanitary Manufactur-
ing Company of Detroit.
Everett-Metzger-Flanders Company,
of Canada.
57
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58
EVERETT-METZGER-FLANDERS CO.
The record of the company during its
two and one-half years of operations
shows the following remarkable results:
Cars
From Produced Sales Net profits
Aug. 4, 1908, to
Dec. 31, 1909 8,132 ?7,366,428.27?1,607,776.17
Year Ending
Dec. 31, 1910 15,300 13,869,986.87 1,606,305.72
Totak 23,432 ?21,236,41S.14?3,214,081.89
Dividends Surplus
Aug. 4, 1908, to
Dec, 31, 1909 ?314,824.00 ?1,292,9S2.17
Year Ending
Dec. 31, 1910 250,000.00 1,356,305.72
Tocals ?564,824.00 ?2,649,257.89
The company was merged into The
Studebaker Corporation as of December
31, 1910, and the following balance sheets
show its condition at the time of its
formation and of its later merger:
59
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EVERETT-METZGER-FLANDERS CO.
BALANCE SHEETS
Assets Aug. 4, 1908 Dec. 31, 1910
Cash 3 52,322.59 $ 70,492.40
Receivables 55,450 .09 919,304 . 68
Investments 142,494 . 16
Inventories 95,738.28 2,338,134.62
Plants and Property 153,438.77 3,827,293.23
Deferred Charges . . . 16,358 . 15 40,234.02
Total ?373,307.88 ?7,337,953 .11
Liabilities
Notes Payable $ 17,873 .50 ?1,765,262 .67
Accounts Payable... 94,434.38 1,923,432.55
CapiulStock(Issued) 261,000.00 1,000,000.00
Surplus 2,649,257.89
Total ?373,307.88 ?7,337,9S3 .11
Net Worth ?261,000 .00 ?3,649,257 . 89
61
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THE STUDEBAKER CORPORATION
'T^HE necessity for additional capital
to finance the development of the
automobile business required the organi-
zation of The Studebaker Corporation,
which acquired the business, plants, and
trade names, of Studebaker Brothers
Manufacturing Company and Everett-
Metzger-Flanders Company and their
subsidiary companies, as of December
31, 1910. The Studebaker Corporation
was incorporated February 14, 1911,
under the laws of the State of New
Jersey, with an authorized capitalization
of 315,000,000 of 7 per cent cumulative
preferred stock, of which 313,500,000
was issued, and 330,000,000 of common
stock, all issued, with par values 3100
per share in each case.
63
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U^u' 367ik
- ^*V-*"*rtAfl/^
'^^du^^^.
Types of Branch Houses
1918
THE STUDEBAKER CORPORATION
The capitalized tangible assets of the
merged companies were obtained from
the following sources:
Studebaker Bros. Mfg. Co. —
Original capital and
surplus of H. &
C. Studebaker. . . $ 223,269.06
Subscribed Capital 75,000.00
6% Preferred Stock
issue 1,500,000.00
Surplus Profits
(43 years) 9,916,594.06
311,714,863.12
Everett-Metzger-Flanders Co. —
Original Capital . . . 31,000,000.00
Surplus Profits .... 2,649,257.89 g3,649;257.89
Tangible assets of merged com-
panies 315,364,121.01
To these assets were added the
proceeds from the sale at par
of a like amount of the 7%
Preferred Stock of The Stude-
baker Corporation, amounting to 8,328,602.35
(Of this, 32,600,000 was used to
retire outstanding First Mort-
gage Bonds of S. B. M. Co.)
Total assets of the new corporation 323,692,723.36
65
Houses of Foreign Dealers — 1918
66
THE STUDEBAKER CORPORATION
These assets were distributed as follows:
Cash $ 6,243,619.69
Receivables 5,566,977 .42
Investments 742,513 .29
Inventories 14,643,419 .92
Deferred Charges 251,358 . 52
Total Quick Assets ?2 7,447,888 .84
Less all Liabilities 13,567,155 .82
Working Capital ?13,880,733 .02
Plants and Property 9,81 1,990 . 34
Total Tangible Assets .... $23,692,723 . 36
Outstanding against these assets was
the issue of 313,500,000 of preferred
stock, for which the corporation received
par from the bankers who purchased it,
and 330,000,000 of common stock.
The financial reorganization of the
Studebaker business was of an ultra-
conservative character, in that preferred
stock was issued for only 57 per cent of
its net tangible assets, which gave the
stock an original book value of 3175.50
67
Types of Studebaker Farm Wagons
68
THE STUDEBAKER CORPORATION
per share, of which 3103.03 per share
was represented by net quick assets.
The common stock had an original book
value of 336.49, of which 31.47 was net
quick assets.
As a result of the retention in the
business of 50.9 per cent of the net profits
of the past seven years, the book values
of these stocks, December 31, 1917, were
as follows: Preferred stock, 3355,79 per
share, of which 3214.64 was represented
by net quick assets. Common stock,
after deduction of 3100 for the preferred
stock, 393.49 per share, of which 341.90
was represented by net quick assets.
The stocks of the corporation, both
common and preferred, are listed on the
New York, Chicago and Detroit Stock
Exchanges.
The charter of the corporation requires
that annually, after July 1, 1912, 3 per
cent of the largest amount in par value
of preferred stock that shall have been
Types of Studebaker Buggies
70
THE STUDEBAKER CORPORATION
issued shall be set apart out of net profits
in a special surplus and utilized for the
purchase and retirement of preferred
stock. In accordance with this provision,
the corporation has during the past
seven years purchased in the open
market and canceled 25,350 shares of
preferred stock at a cost of 32,548,654. 17,
thereby fulfilling the requirements up to
and including the fiscal year of 1918, and
reducing the amount of preferred stock
outstanding at present to 310,965,000.
When the corporation was organized it
assumed the indebtedness of the merged
companies in notes payable amounting
to 310,257,236.69; and although it re-
ceived 35,728,602.35 new money at the
same time, this money was needed to
finance the immediate and continuous
growth of the business. The sales of the
merged companies in 1910, the last year
of their operations, amounted to 323,-
473,600, and if the sales of the new
71
Types of Studebaker Dump
AND Delivery Wagons
72
THE STUDEBAKER CORPORATION
corporation had not greatly exceeded
this figure, the fresh capital and future
profits would have paid off a large part
of the floating indebtedness in a few
years. Instead of a moderate growth,
the new corporation was immediately
compelled to finance, in plant additions,
increased inventories and increased
receivables, a remarkable growth of busi-
ness, as is shown by the appended table
of sales:
,, No. Automobiles , T^}?^ %^^.' i Increase Over
Year gold Including Vehicles jqiq
and Harness
1911 22,555 328,487,900 21.4%
1912 28,523 35,440,300 50.9%
1913 35,410 41,464,900 76.6%
1914 35,460 43,444,200 85.1%
1915 46,845 56,539,000 140.9%
1916 65,885 61,988,600 164.1%
1917 42,357 50,147,500 113.6%
Totals 277,035 317,512,400 93.2 (avg.)
On March 1, 1912, a large part of the
indebtedness was funded by the issu-
ance and sale, on very favorable terms,
73
Types of Studebaker Flushers
AND Oilers
74
THE STUDEBAKER CORPORATION
of 38,000,000 of five per cent ten-year
serial gold notes, payable ^00,000 semi-
annually, on September 1st and March
1st, from 1912 to 1922.
In the latter part of 1914, through
increase of profits and heavy reduction
in vehicle inventories, it was possible
to anticipate payment of some of the
serial notes, and at the end of that year,
the entire floating debt, including serial
notes, had been reduced to 37,400,000.
The profits of the next two years per-
mitted anticipating payment of the re-
maining serial notes and all bank loans, so
that by the spring of 1916 the corporation
was entirely freed from floating debt.
Additionally, it had also retired 32,535,000
of preferred stock, and on June 1, 1915,
had placed the common stock on a five
per cent dividend basis, which was
increased to 10 per cent on December 1st
of the same year. This 10 per cent rate
was continued until August 7, 1917,
75
Types of Studebaker Harness
76
THE STUDEBAKER CORPORATION
when, on account of changed conditions
resulting from the war, it was reduced
to a 4 per cent basis. The 7 per cent
dividends on the preferred stock have
been regularly paid by the corporation
from the date of its organization..
The financing of the new corporation
was handled by the banking firms of
Goldman, Sachs & Co. and Lehman
Bros., of New York City, which brought
into its counsels and directory several
representatives of these firms whose
advice and support have proved invalu-
able to the corporation. Most notable
of these has been Henry Goldman, who,
as a member of the executive committee,
has kept himself constantly informed of
all important matters affecting the busi-
ness, and without any compensation or
reward, given it the benefit of his great
ability.
Shortly after the outbreak of the war
in August, 1914, the English Govern-
ment, which had used Studebaker wagons
General La Fayette's Carriage
Used by him during tour of United States
1824-1825
President Lincoln's State Carriage
Used during night of his assassination
Relics in Studebaker Museum
78
THE STUDEBAKER CORPORATION
in the Boer War, placed a cable order
with the corporation for 3,000 transport
wagons selected from its catalog, which
order was filled in six weeks. Rapidly
following came an order for 20,000 sets
of six-horse English artillery harness and
60,000 artillery saddles, probably the
largest single order of its kind ever
placed. The contract required this order
to be completed within twenty weeks,
and it was actually completed in sixteen.
Orders followed for ambulances, drinking
wagohs, spare parts, and repeat orders
on harness and saddles, while this gov-
ernment bought hundreds of Studebaker
cars from the Studebaker house in
London.
The corporation also received large
orders for vehicles, harness and auto-
mobiles from the French and Russian
governments, all of which were filled
satisfactorily to both parties.
With the entry of our own government
into the war, the corporation instantly
79
General Grant's Carriage
Used during his last term
1873-1877
Old Studebaker Phaeton
Built by H. & C. Studebaker in 1857
Relics in Studebaker Museum
THE STUDEBAKER CORPORATION
placed its plants at the disposal of the
President, and later delegated two of its
executives upon important committee
work, whose purpose it was to mobilize
raw materials, control prices to be paid
by the Government and assist it in obtain-
ing its requirements promptly.
At the present time the corporation is
devoting half of its plant capacity to Gov-
ernment work, covering orders for large
quantities of military supplies of a char-
acter suited to our equipment and in line
with our manufacturing experience.
To handle this work, it became neces-
sary to reduce our regular manufacturing
schedules of automobiles and vehicles
and rearrange our plants on a war basis.
This undertaking involved some unusual
expenses and consumed considerable time,
but it is now well accomplished, and we
feel gratified at having voluntarily met
the issue and placed ourselves in position
to serve our Government as long as the
81
RUNABOUT
1902
PANEL DELIVERY
1904
Types of Studebaker Electric
Automobiles
82
THE STUDEBAKER CORPORATION
war may last, freely and without com-
pulsion.
Ample evidence is gradually being dis-
closed that substantial use and service
is expected by the Government from the
automobile plants of the country, which
are accordingly reducing their output of
passenger automobiles.
To what extent this situation will
finally curtail the total production
of passenger cars, depends upon the
duration of the war, but as we have
adjusted ourselves to conditions, we hope
to maintain our business in a healthy
condition, and be prepared to take
prompt advantage of the opportunities
that will be open to us when peace returns.
A review of the results of the business
of the corporation for the seven years
ending December 31, 1917, discloses many
interesting facts, of which the following
are most important:
83 .
VICTORIA-PHAETON
1908
COUPE
1912
Types of Studebaker Electric
Automobiles
84
THE STUDEBAKER CORPORATION
Its seven plants at South Bend, Detroit,
Chicago, and Walkerville, Ont., cover
167.89 acres, contain 4,704,118 square
feet of floor space, and after charging off
32,193,048.30 for depreciation, represent
an investment of 315,477,186.41.
Acres
Square feet
South Bend Plants
131.90
2,642,581
Detroit Plant No. 1
6.61
518,757
No.2 ....
1.88
112,171
No.3 & 4
16.66
883,241
No.lO...
3.24
140,630
Chicago " No.8 ....
4.84
304,400
Walkerville, Ont., Plant
2.76
102,338
Totals
. 167.89
4,704,118
The annual capacity of these plants is
100,000 automobiles, 75,000 horse-drawn
vehicles, and about 310,000,000 worth of
automobile and vehicle spare parts and
harness.
The products include a complete line
of passenger automobiles, with a line of
trucks in contemplation, and complete
lines of farm wagons, dump wagons, heavy
service wagons, sprinklers, flushers, bug-
gies and harness.
85
1904
1908
Types of Studebaker Gasoline
Automobiles
THE STUDEBAKER CORPORATION
The industrial pay rolls for 1917
amounted to 38,677,456.00 and the aver-
age number of employees was 9,444.
The average number of employees on
the administrative and commercial pay
rolls during last year was 2,830 and
the salary roll was 33,526,404.00.
The total salary and pay rolls were
312,203,860.00 and average number of
persons employed was 12,274.
There were 6,000 dealers and 26
branch houses handling Studebaker auto-
mobiles throughout the world at the
close of the year.
There were 6,000 dealers and 8 branch
houses handling Studebaker vehicles and
harness throughout the world at the close
of the year.
There were 277,035 automobiles and
466,962 horse drawn vehicles sold in the
seven years.
The total sales during that period
amounted to 3317,512,400.
87
[I ^
STUDEBAKER *'30"
1908
STUDEBAKER "20"
1910
Types OF Studebaker Gasoline
Automobiles
83
THE STUDEBAKER CORPORATION
The total net profits amounted to
330,126,600, which was 9.5 per cent of
the sales. These net profits were disposed
of as follows:
Total
The regular 7% dividends
paid to preferred stock-
holders amounted to 19.2%
(the preferred stock
dividend was earned 5.2
times annually.)
The dividends paid to
common stockholders
amounted to 21.5%
(after deducting pre-
ferred dividends, the
amount remaining for
the common stock
averaged 11.6% an-
nually.)
The amount paid to pur-
chase and retire pre-
ferred stock was 8.4%
The amount of net profits
kept in the business
and used to discharge
debt and finance
growth was 50.9%
Total 100%)
89
Studebaker Delivery Wagon
1917
Studebaker Light Four
Weight, 2400 lbs.
1918
90
THE STUDEBAKER CORPORATION
Appended are condensed balance sheets
showing the condition of the corporation
as of the date of its formation and as of
December 31, 1917, from which greatly
increased financial strength is evidenced.
91
Studebaker Light Six
Weight, 2925 lbs.
1913
Studebaker Light Six
Weight, 2800 lbs.
1918
92
THE STUDEBAKER CORPORATION
BALANCE SHEETS
ASSETS Dec. 31, 1917 Dec. 31, 1910
Cash $ 2,528,555.07 $ 6,243,619.69
Receivables 9,325,498.96 5,566,977.42
Investments 847,672 . 17 742,513.29
Inventories 21,322,134.35 14,643,419.92
Deferred Charges 358,683.81 251,358.52
Quick Assets . .334,382,544.36 327,447,888.84
Plants and
Property. 315,477,186.41 3 9,811,990.34
Good Will, Trade
Marks, etc.... 19,807,276.64 19,807,276.64
Total 369,667,007.41 357,067,155.82
LIABILITIES
Notes Payable... 3 7,400,000.00 310,257,236.69
Other Payables.. 3,447,277.78 3,309,919.13
Current Lia-
bilities 310,847,277.78 $13,567,155.82
Preferred Stock.. 310,965,000. 00 $13,500,000.00
Common Stock.. 30,000,000.00 30,000,000.00
Surplus and
Reserves 17,854,729.63
Total 369,667,007.41 357,067,155.82
93
THE STUDEBAKER CORPORATION
Summarizing the important features of
the foregoing balance sheets, it will be
seen:
That the net tangible assets (exclusive
of trade name and good will) are 339,012,-
452.99, an increase of 315,319,729.63.
That the working capital (the differ-
ence between the total quick assets and
all liabilities) amounts to 323,535,266.58,
an increase of 39,654,533.56.
That the total capitalization is 340,965,-
000, a decrease of 32,535,000, due to the
retirement of preferred stock.
That the floating debt is 37,400,000,
a decrease of 32,857,236.69.
That the ratio of quick assets to all
liabilities is 317 per cent, an increase of
56.1 per cent.
95
rjITj ORIGINAL
■KNT FBOM Ol
TELEGRAM
XOf THE STUDEB.\k£K CORTORATION, aovTH KBND. IND.
To th» PTOidtnt,
The VhiU Houds.
WashlneXon, 9.C.
atadcbaker fsotoriss of cottrss ar* at ta« disposal of Xb»
SOTamaant. Any ordara giTan u$ will racaiTa prafaranoa and
olesr rli^ht of vay.
A.H.Brakina'. Fraxidant.
TUB STUQ3BA£SR CORPOBATIOH.
TMC WHITt MOUSt
96
THE STUDEBAKER CORPORATION
That the plant and property account
IS 315,477,186.41, an increase of 35,665,-
196.07 or 57.7 per cent. This small
increase of plant and property account
compares with increases in the volume
of output or sales, over 1910, amounting
to 164.1 per cent in 1916 and 113.6 per
cent in 1917, as shown on page 73.
The House of Studebaker has existed
sixty-five years.
Industry, economy and patience char-
acterized the Studebaker brothers, whose
hearts, as well as heads, were in their
business. Profits were always secondary
to the conservation of reputation and
good will, and hence we find that during
the forty-three years in which they
operated under the name of Studebaker
Brothers Manufacturing Company, they
and their stockholders withdrew only
six million dollars of dividends from net
profits of sixteen million dollars, and left
the larger part of ten million dollars
remaining in the business.
97
POOLE BROS. OHIOAOO.
,. Tmia jf OOK I» DX7E OK THE LAST DATE
8TA3IPEI) BELOW
AN INITIAL FINE OP 25 OENTS
WJLL BE ASSESSED FOR FAILUHE TO RETUItN
THia BOOK ON THE DATE dUE. THE PENALTY
WILL JNCREASE TO SO CENTS ON THE roURTH
DAY AND TO ft.OO ON THE SEVENTH DAY
OVERDUE.
*^^ 1 fjH loin
^^^ ^2 1939
^ *^v9
MAY 21 1940
28MarM9Rl
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